N7830

PAPUA NEW GUINEA
[IN THE NATIONAL COURT OF JUSTICE]

WS No. 1431 of 2017 (CC 3)

BETWEEN:
HEVA JONES RARUA as one of the executors of
the Estate of Thomas Daure Jones (deceased)
Plaintiff

AND:
BALLIMORE NO. 39 LIMITED
First Defendant

AND:
TIARE NO.  26 LIMITED
Second Defendant

AND:
CURTAIN BROS HOLDING (NG) LIMITED
Third Defendant

Waigani:	Thompson J
2019:     25th & 29th April

PRACTICE AND PROCEDURE - Application to dismiss for abuse of process – No requirement to file defence – Res judicata – Statutory time limit

Counsel

Mr R Tuva, for the Plaintiff
Mr M Varitimos and Mr P Tabuchi,        for the Defendants

29th April, 2019

1.	THOMPSON J:	The Defendants are applying under Order 12 Rule 40 to dismiss the proceedings for being frivolous, vexatious and an abuse of process.

2.	The Plaintiff opposes the application on the grounds that the Defendants have not yet filed a defence, and so the application is premature.  There is no provision in the National Court Rules which imposes any such requirement.    This has been confirmed by the Supreme Court in the cases of Waim No. 85 Ltd v The State (2015) SC 1405 and Hiwi v Rimua (2015) PGSC 60.  This submission is rejected.

3.	The Defendants’ application is based on various grounds.  

4.	First, there is a challenge to the capacity of the Plaintiff.   On the face of the proceedings, the Plaintiff is shown as one of several executors of the estate, and in the amended Writ of Summons, the Plaintiff pleads that she is one of three executors.  There is no pleading that the action is also being brought by the other 2 executors.  Prima facie, where there is more than one executor, a single executor does not have the power to issue proceedings on behalf of the estate.    There are many case authorities which require the capacity in which a person is suing in a representative action, to be properly pleaded and endorsed on the writ.   However, this is a defect which is capable of being cured.   I accept the Plaintiff’s submission that it is more appropriate for the Defendants to raise this issue in a defence or a request for particular, which will give the Plaintiff an opportunity to answer the objection by either a Reply or amendment or particulars.  

5.	The next ground is that the proceedings are res judicata, as the Plaintiff had already issued parallel proceedings on OS 734 of 2017.  Those proceedings were dismissed, and are now the subject of an Appeal.   The parties in this current proceeding on WS 1431 of 2017 are also parties in the earlier proceedings, and although the pleadings have some differences, the Plaintiff is claiming effectively the same relief, namely, a transfer of the land known as Motukea Island to the Plaintiff, based on a breach of a contract for the sale of the land which was made in 1992.   

6.	The earlier proceedings were dismissed for being an abuse of process.  The Supreme Court in GR Logging Ltd v Dotaona (2018) PGSC 34, has determined  that in order for res judicata to apply, the earlier decision must not only be judicial, pronounced and final, it must also be on the merits. A dismissal for abuse of process is not a decision on the merits, and therefore does not give rise to the application of res judicata.    

7.	The Defendants next submit that the pleadings do not contain only facts, do not sufficiently particularize illegality or fraud, and have a tendency to cause embarrassment and delay.   They also submit that the amended statement of claim fails to disclose a cause of action.

8.	The causes of action are difficult to identify.   In para 10, the Plaintiff pleads that the title to the land of Motukea Island had been surrendered to the First Defendant, but that the First Defendant breached the 1992 contract by not paying the purchase price.  Paras 11 – 21 relate to a draft unsigned deed of release which is of no relevance.   In para 25, the Plaintiff says that the Defendants sold the land to the State.  In para 26 the Plaintiff refers to various illegal removals of directors and changing of shareholdings in the Plaintiff’s and Defendant’s companies, from 1992 – 2003.      In the relief, the Plaintiff is claiming the return by transfer of the land as well as damages for breach of the 1992 contract, including profits since 1992. The Plaintiff also seeks changes in directors and shareholdings in the First and Second Defendants.     If the contract for the sale of the land from the Plaintiff to the First Defendant was completed, it is not clear how it can be alleged that the land should be transferred to the Plaintiff.   The basis of the claim for changes in directors and shareholders is also not clear.

9.	It is difficult to determine if the amended statement of claim discloses a reasonable cause of action.  Most of the pleadings are not of material facts giving rise to a cause of action known to law.  However, there is a pleading in para 10 of facts giving rise to a cause of action for breach of contract for failure to pay the purchase price.    This may be sufficient to disclose one prima facie cause of action.

10.	 This leads to the next ground, which is that the proceedings are time-barred.  The matters set out in the amended Writ of Summons are based on an alleged breach of a contract in 1992, and there are references to alleged illegal acts relating to directors and shareholdings from 1992 to 2003.  If it is assumed that these matters give rise to valid causes of action, they had to be enforced by the issue of proceedings within the 6 year time limit provided by Section 16 of the Frauds and Limitations Act.  As the proceedings were not issued until 2017, they are time-barred.   

11.	In the Amended Writ of Summons, the Plaintiff has added a new claim for relief under the Fairness of Transactions Act.  However, any such claim, apart from being insufficiently pleaded, would also be time-barred under Section 11         of that Act, as not being brought within 3 years of the 1992 transaction or the 1992 – 2003 transactions, even if they came within the definition of “transaction” in that  Act.    
 
12.	The Plaintiff submits that the 6 year time limit does not apply, because she is claiming specific performance, and so is covered by Section 18 of the Frauds and Limitations Act.  

13.	The Plaintiff has submitted that by the claim for relief in para 31 (c), she is seeking specific performance because the contract had not been performed.    This very issue was considered by the Court in Hiwi v Rimua, where the Court considered the Plaintiff’s argument that the Plaintiff was not pleading breach of contract but a failure to perform the contract.   The Court said:

“This is a fine but illusory distinction in which we find no merit.  If a Plaintiff pleads that a contract has not been performed according to its terms, he is surely pleading that the contract has been breached.”
14.	That is the same position here.  By saying that the contract has not been performed according to its terms, allegedly by non-payment of the purchase price, the Plaintiff is surely pleading that the contract has been breached.  The Plaintiff does not deny and in fact pleads that there has been performance of the remainder  of the contract relating to the transfer of land to the First Defendant who subsequently sold it to the State, which is what forms the basis of the claim for the return of the land.

15.	Further, in Hiwi v Rimua, the Court said that an action only falls within Section 18 of the Frauds and Limitations Act if the relief sought by a Plaintiff is confined to specific performance.  It is not sufficient for a Plaintiff to seek specific performance in addition to other remedies.    

16.	Accordingly, even if the Plaintiff was actually claiming specific performance and not merely breach of contract, it is not enough to attract the cover of Section 18 of the Frauds and Limitations Act, because the claim for specific performance is only one of 7 types of relief sought by the Plaintiff.  As the relief is not confined to specific performance, it is not covered by Section 18, and the 6 year time limit applies.  

17.	Following the principles set out in Oil Search Ltd v Mineral Resources Development Corporation Ltd (2010) SC 1022, the Plaintiff’s causes of action, if any, have been identified as breach of contract and illegal conduct.  These actions are categorized as founded on simple contract, and tort, and they accrued in 1992 – 2003 when the alleged breach and illegality occurred.  

18.	This is therefore a clear case of the proceedings being time-barred by statute.  

19.	Following the principles set out in Lerro v Stagg (2006) PGNC 2, a claim is frivolous if it cannot possibly succeed and is bound to fail if it proceeds to trial.

20.	As the proceedings are clearly time-barred, they cannot possibly succeed, and fail to disclose a reasonable cause of action.

21.	I therefore make the following orders:  

(a)	 The proceedings herein are dismissed.

(b)	The Plaintiff shall pay the Defendant’s costs, to be agreed or taxed.

(c)	The time for entry of the order is abridged to the time of settlement with the Registrar, which shall take place forthwith.
__________________________________________________________________
Tuva & Associates Lawyers:  Lawyers for the Plaintiff		
Young & Williams Lawyers: Lawyers for the Defendants